FCA to hire 80 new staff as part of three-year strategy to shut down ‘problem firms’
The City watchdog has launched a three-year strategy tightening regulations to help protect consumers.
The UK’s financial watchdog says it is prioritising resources to “prevent serious harm, set higher standards and promote competition”.
It will also hold itself accountable against published outcomes and metrics for the first time.
Anne Fairweather, Hargreaves Lansdown head of government affairs and public policy, described the three-year plan as a “welcome step forward”.
“In particular, we welcome the fact that the FCA sees informed and empowered consumers as an important defence against bad conduct,” Fairweather said.
“Over time, consideration needs to be given as to how this aim is measured. Data from firms, collated under the consumer duty, could really drive this ambition.”
She stressed that there should also be a broader aim to help consumers improve their “financial resilience”, such as preventing high-risk investments.
“[O]ver the coming 3 years, using the consumer duty as a driver, we believe that firms can and should do more to improve the outcomes for consumers, ensuring that they are building their resilience over time," she added.
A large part of the strategy will focus on shutting down “problem firms” that do not meet regulatory standards.
The FCA is hiring an additional 80 employees in new roles to help close these companies, protecting consumers from potential fraud and poor treatment.
The strategy builds on CEO Nikhil Rathi’s decision to commit the regulator to become more “innovative, assertive and adaptive” last July, in a move towards being a more data-led platform.
“Our new strategy enables the FCA to respond more quickly to the rapidly changing financial services sector,” Rathi said.
“It will give us a foundation to continuously improve for the benefit of our stakeholders, and respond swiftly to economic and geopolitical developments.”
The FCA anticipates saving consumers an expected £4.2bn over 10 years, leading the transition from LIBOR, helping small businesses claim £1.3bn against business interruption insurance cover, protecting consumers from scams and bringing its first-ever criminal prosecution under anti–money laundering regulations, fining NatWest £264m.
The FCA has also considered the rising cost of living in its plan, noting a potentially greater demand for credit products and a reform in the ways consumers manage their money.
The regulator said that while quantifying its impact is difficult as prevention of potential harm cannot have a specific value, it estimates that for every pound it spends on operations, consumers and small benefits benefit by at least £11.